Smears, attacks and plonk

I cannot recall ever before having the pleasure of watching a ‘slugfest’ between the two monopolies in our industry, staid old De Beers and our bouncing Emperor, Boney.

It has all made for added pleasure to the week.

It kicked off for me when a chum kindly forwarded to me a note from De Beers to, I believe, their sightholders, headed ‘Comments made by Martin Rapaport’.

It makes for quite delightful reading, “Martin’s name calling, smears and racial incitement demean the diamond industry … We repudiate his comments fully and completely. We refuse to submit to a world in which he who shouts loudest wins… he threatened us repeatedly…”

All good cheering stuff, as far as I am concerned, whatever the subject at issue may happen to be, which, as an aside, is apparently all about De Beers refusing to allow Boney, and others, to use their brand when he sells their diamonds.

The fun only increased when I received Boney’s press release of June 19th in which he claims that “De Beers actions is to deny legitimate companies and non profitable organizations, such as the Gemological Institute America the ability to track the legitimacy of polished diamonds.”

Boney is quoted as saying, “De Beers is extending its market power from rough to polished markets through exclusive polished distribution networks such as the Forevermark.”

It goes onto say that “Rapaport is also calling out De Beers for personally attacking Martin Rapaport with false statements….”

From where I sit with a large glass of some rather delicious Italian plonk half empty, or should I say full, both these protagonists have a point or two.

Boney quotes De Beers market share in 2017 as 42% of rough production, a bit on the high side I think but certainly closer to the reality of De Beers who is always trying to talk it share down to as close to 30% as it dare to get out of the clutches of being a monopoly.

To read in the De Beers statement about the glories of its Best Practice Principles, which apparently ensures audits of the ethical performance of its clients, and that it has elevated standards of financial reporting and transparency is pleasantly off beat.

I would only point to the $1.8 billion fraud of Modi / Choksi to question such rash claims, there is plenty more that one could dig out if one wanted to.

De Beers’s custodial role of the diamond industry has been an abject failure in pretty much every single sense and in particular their fetish for control has not done anything to enhance the comparative performance of diamonds, which has been woeful.

On the other hand, however much Boney screeches out the obvious about De Beers being a monopoly, he pointedly doesn’t mention his.

The Rap list has put a glass ceiling on polished diamond prices for decades, it is an outrageously opaque system based on his opinion, so to accuse De Beers about lack of transparency is ripe in the extreme.

De Beers have certainly hit the nail on the head when complaining about Boney’s screaming and shouting as if he was paragon of moral rectitude, he isn’t, but then who is?

Both Boney and De Beers do whatever they think is best for themselves and they could not give a fig leaf for anything else.

The big problem is that both views about what is best for themselves is certainly not what is best for everyone else.

Hopefully, there will be some more correspondence in this tit for tat between the two to keep us amused, though De Beers having ventured out of its cave will probably slink back in and get on with its mismanagement.

Our hopes for further episodes rest with Boney, who traditionally has always found it difficult not to vent his views in public, that was of course apart from the certificate scandal some time ago when he was painfully noticeable by his loud silence.

It would be too much to hope that the ding dong would result in the demise of both monopolies, somewhere along the line there will probably be a kiss and make up as both need each other.